HomePoliticsRBZ tasked to plug diamond leakages

RBZ tasked to plug diamond leakages

PRESIDENT Robert Mugabe has tasked the Reserve Bank of Zimbabwe (RBZ) to come up with ways to plug diamond leakages as government institutes desperate measures to increase revenues inflows that have been perilously dwindling, the Zimbabwe Independent has learnt.

Top government sources say Mugabe’s office has tasked the central bank to assist with measures to ensure all diamond revenues due to national coffers are collected.

This, according to sources who requested anonymity, followed submissions by the RBZ to government that mining revenues alone could turn around the economy if leakages are sealed.

“The money lost through illegal and underhand diamond deals could actually turn around this economy; it’s that simple and I can tell you that we don’t need anything special other than making sure we collect what we are supposed to get not only from diamonds but all minerals,” said a government insider.

Already, the RBZ is on the verge of completing a diamond cutting and polishing joint venture with wholly state-owned diamond producer, Marange Resources. The two will also manufacture jewellery.

These efforts coincide with a Mines ministry-led initiative to consolidate the five companies operating in the Marange diamonds fields into a single entity.

The five companies are Anjin, Diamond Mining Corporation (DMC), Jinan Mining Private Ltd, Marange Resources and Mbada Diamonds. Two companies, GyeNyame and Kusena, went under recently and will be taken over by Marange Resources.

Provisionally, government will hold a 50% stake in the new consolidated company while the five players will share the other half depending on their balance sheets.

The move, according to Mines minister Walter Chidhakwa, is part of efforts to foster greater transparency and accountability in the country’s diamond mining operations.

However, as reported by the Independent last week, companies operating in Marange are reportedly on a last minute looting spree ahead of a mandatory consolidation exercise.

While government peruses through various consolidation proposals submitted by companies operating in Marange and prepares for an audit, miners are reportedly exploiting the existing loopholes as they await their fate under the new structure.

As the country’s revenues continue to dwindle in tandem with the long-drawn economic crisis, largely due to company closures, government is increasingly desperate to raise funds to support its expenditure largely in the form of civil service wages that are gobbling up more than 80% plus of national spending.

During his 2015 national budget presentation last year Finance minister Patrick Chinamasa said government would spend 92% of revenues on recurrent expenditure, leaving a negligible 8% for capital projects and service delivery.

According to the Zimbabwe Revenue Authority (Zimra), net corporate income tax for 2014 amounted to US$372,1 million against a target of US$426 million, missing the target by 13%. The revenue collector warned corporate tax collections would plunge further this year.

So tight is the cash situation that government is defaulting on loan, insurance and medical aid payments on behalf of its workforce after making the deductions from their salaries.

The broke Zanu PF government recently extended a begging bowl to local companies to help it out by funding an extraordinary Sadc summit set for Harare later this month. — Staff writer.

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